A Benefit of Using Credit Cards Is That They

question 215

Multiple Choice

A benefit of using credit cards is that they

• A) have lower interest rates than other forms of credit.
• B) provide a record that makes it possible to keep track of purchases easily.
• C) help consumers be more disciplined when it comes to spending decisions.
• D) allow the consumer to spread out payments and reduce overall costs.

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Definitions:

Prospect Theory

A psychological theory that describes how people make decisions based on the potential value of losses and gains rather than the final outcome.

Endowment Effect

A psychological phenomenon where people ascribe more value to things merely because they own them.

Prospect Theory

A behavioral economic theory that describes how people make decisions under conditions of risk and uncertainty, prioritizing losses differently from gains.

Framing Effect

A cognitive bias where people decide on options based on whether they are presented in positive or negative terms.